Discussn CPF : Anyone alredy reached ERS ($450k) or topping up FRS to ERS ?

[Ronin881]

I don’t like so much funds tied up in ERS. I will only go for FRS.

Don't tell your friends.

Easier to say that you opted for ERS and got not much money to lend out.

 

[homedriver]

Let’s compare ERS and stock.
For ERS u deposit 450k at age 55 and start withdrawing $3,400 monthly from the age of 65. Assume if died at age 85. Total payout is $3,400 x 12months x 20years=816k
Total amount accumulated is 816k

For stock u deposit 450k at age 55 and with 4% dividend $1,500 monthly from the age of 55.
Assume if died at age 85. Total payout is $1,500 x 12months x 30years =540k
Total amount accumulated is 540k + 450k (initial capital) = 990k

In summary, my ERS money will reset to zero at 85. However, for stock I will leave my initial stock capital of 450k to my beneficiary. For a 20-year long-term stock investment, almost 100% of the capital will likely grow.

 

[dev_stg_prd]

I don’t like so much funds tied up in ERS. I will only go for FRS.

What about going down to brs ?

 

[keenklee]

IMHO.
I use AI to compare.
Got exact money for ERS.
ERS vs FRS+OA, if continue to work from 55 to 65 earning $80k p.a.,
FRS+OA draw down from 65 the same as ERS will last until 99 years old.
advantage of FRS+OA is that you can draw down lump sum for needs.
ERS, the $ just get stuck inside.

Think about this.... at 85 years old, you got higher monthly disbursement, will you benefit from it ?

 

[keenklee]

What about going down to brs ?

IMHO.
If you know how to grow your own money, why not ?

 

[MajiMax]

IMHO.
I use AI to compare.
Got exact money for ERS.
ERS vs FRS+OA, if continue to work from 55 to 65 earning $80k p.a.,
FRS+OA draw down from 65 the same as ERS will last until 99 years old.
advantage of FRS+OA is that you can draw down lump sum for needs.
ERS, the $ just get stuck inside.

Think about this.... at 85 years old, you got higher monthly disbursement, will you benefit from it ?

One downside I can think of is next time cannot get subsidised nursing home placement due to having high CPF Life ERS payout.

 

[keenklee]

One downside I can think of is next time cannot get subsidised nursing home placement due to having high CPF Life ERS payout.

IMHO.
You have deep insights ! maybe not only nursing home, other subsidy will auto made not eligible - unless CPF life is not counted !

I go ask AI. Note, not verified.

2. Financial & Eligibility Assessment Contexts​

How CPF LIFE payouts are categorized depends on the application:

• Bank Loans & Mortgages: Banks generally classify CPF LIFE payouts as guaranteed passive income. They can count toward your Total Debt Servicing Ratio (TDSR) calculations when assessing debt affordability.
• Means-Testing for Government Subsidies / Grants: Government schemes (such as CHAS cards, MediFund, or GST Voucher eligibility) typically evaluate household income based on Gross Monthly Income from Employment or Annual Value (AV) of Property, rather than CPF annuity payouts.
• Dependant Tax Relief (e.g., Spousal/Parent Relief): If someone is claiming you as a dependant for tax relief, CPF LIFE payouts are non-taxable retirement withdrawals and do not count toward the earned income ceiling used to disqualify dependant relief claims.

 

[dev_stg_prd]

IMHO.
If you know how to grow your own money, why not ?

I think post 55, could it be the objective is not simply just grow but also maintain your capital

 

[keenklee]

I think post 55, could it be the objective is not simply just grow but also maintain your capital

IMHO.
Think of CPF as a safety net for most people, your "capital" is protected slowly feeding you.
If do own investment, is subjective. You see got people get scammed, maybe some of the money is from CPF ?!

 

[MajiMax]

IMHO.
You have deep insights ! maybe not only nursing home, other subsidy will auto made not eligible - unless CPF life is not counted !

GST voucher, CHAS Card do not look into CPF Life payout.

ComCare assistance and MediFund do.

 

[keenklee]

GST voucher, CHAS Card do not look into CPF Life payout.

ComCare assistance and MediFund do.

IMHO.
Thanks for info. Maybe aim BRS. max benefits.

 

[chiokcc]

 

[bruiser69]

What about going down to brs ?

For me I’ll just choose Standard Plan and FRS in future

 

[dev_stg_prd]

For me I’ll just choose Standard Plan and FRS in future

So far also this is my decision but sometimes I also think about brs.

 

[jq1986]

Let’s compare ERS and stock.
For ERS u deposit 450k at age 55 and start withdrawing $3,400 monthly from the age of 65. Assume if died at age 85. Total payout is $3,400 x 12months x 20years=816k
Total amount accumulated is 816k

For stock u deposit 450k at age 55 and with 4% dividend $1,500 monthly from the age of 55.
Assume if died at age 85. Total payout is $1,500 x 12months x 30years =540k
Total amount accumulated is 540k + 450k (initial capital) = 990k

In summary, my ERS money will reset to zero at 85. However, for stock I will leave my initial stock capital of 450k to my beneficiary. For a 20-year long-term stock investment, almost 100% of the capital will likely grow.

While math is sound, the question is whether you can survive on 1.5k vs 3.4k - an almost $2000 difference and depreciating all the time. Tho it can also be argued that dividends should technically scale with inflation.

I was initially fixed on FRS only, but now thinking about trying to ERS as a way to "unlock" monies safely. This actually also allows you to take more risk on your other monies, e.g. instead of dividend stocks, just go with indexes which should perform over long periods.

 

[inmyopinion]

One downside I can think of is next time cannot get subsidised nursing home placement due to having high CPF Life ERS payout.

CPF Life is a retirement annuity payout, “not income from work“.

CPF Life monthly payout is not included as household monthly income/PCHI for the nursing-home LTC subsidy means test.

Eg. If one is retired. Depending on CPF life monthly payout. Since there is no qualifying household income, the Annual Value of the home becomes important.


For a Singapore Citizen born in 1969 or earlier, the current nursing-home subsidy is:

• AV ≤ $21,000 → 80% subsidy
• AV > $21,000 → 0% subsidy

For someone born after 1969:

• AV ≤ $21,000 → 75% subsidy
• AV > $21,000 → 0% subsidy

https://www.moh.gov.sg/managing-exp...dies-for-residential-long-term-care-services/

https://smmts.moh.gov.sg/web/Docume..._for_Intermediate_and_Long_Term_Care_Form.pdf

 

[Ronin881]

Let’s compare ERS and stock.

Let's not compare ERS and stock.

Why?

ERS is capital guaranteed and you can lose everything in stock (think of Hyflux).

When you are relatively young < 55, you may be a savvy investor.

After 55, you may turn into a grumpy investor who makes bad decisions.

After 55, it better to sit back and enjoy life more rather than still thinking about stocks and shares.

 

[kilo89]

You never include risk in your stock?

 

[kilo89]

CPF life is a annuity, not a investment

 

[twosix]

The question should be ers or invest? If I r 40 only, u still have a long runway for investment.